A sell off last Thursday which dropped the September 14
crude oil contract to a new 6-month low was followed by an equally strong rally
higher the very next day.
By Friday’s close, all nearly all the earlier week
losses had been erased as the September contract settled at 97.35, down just
.30 for the week.
Friday’s rally back higher stalled below 10 and 200 day
moving average resistance which is at the 97.20 level today. A close back
over both averages is needed to turn the near term trend back higher. It
would also likely indicate a market low has been set following a 7-week
downtrend.
If resistance holds and today’s early weakness continues,
last week’s 95.26 low will be primary support followed by 94.30-94.35.
Longer term support from the weekly chart is between 91.00-92.00.
Friday’s Commitment of Trader’s report showed funds long
324,066 WTI crude oil contracts (futures only), down 23,138 contracts from the
previous week. The funds accumulated a record large position of 458,969
contracts in June, the exact week the market last topped.
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – BearishShort Term Trend Following Index - Bearish
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